by Albert (Andy) Dela Cruz

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Three Opinion Pieces

How Profitable Can a Touring Musician’s Career Be?

A musician depends on the touring process to distribute, showcase, and perform their music to an audience. For a musician to be successful, there are many factors that contribute to their success. Some of these factors include merchandise sales, ticket sales, royalties, guarantees, budgeting, and more. Many musicians in the industry believe that touring as a musician will make the musician lose money more than gain. Contrary to the reputation that touring is a rough and difficult career, it is possible to make a lucrative career out of performing as touring musician if planned correctly in respect to planning, expenses, and sales.

Planning is essential into having a successful tour in the career of a touring musician. Independent touring musician Ari Herstand, explains in his blog “How To Tour Without Losing Money” that the planning process involves booking shows prudently. Ari states that every show needs to be booked for either one of two reasons. Two reasons for booking a show are to help fund a tour and to help expose the artist to a newer audience. Ari states that profits from touring can be funded by merchandise sales and venue guarantees. By playing shows, fans are able to buy merchandise, and venue promoters are able to pay the touring musicians a guaranteed amount of money. Ari also states that profits can be increased if bands decide to book a house show at a fan that sponsors their house as a venue for the band. However in the article, “It Seems Bands Don’t Make Money Off Touring Either”, musician Shane Blay, vocalist of band Oh, Sleeper agrees that bands make money off merchandise and venue guarantees. However, Shane argues for the opposite viewpoint as Ari. Shane thinks that despite gaining money from merchandise and venue guarantees, Shane believes that musicians lose money more than they gain. In Shane’s experience, Shane argues that many nice venues have merchandise rates in which the venue takes around a quarter of the money accumulated from merchandise sales. Shane assumes that all venues have merchandise rates, however, Ari suggests that playing house venues can bypass a venue’s merchandise rates because house venues do not charge merchandise rates on tour. The most profitable places for a band to tour has to offer the band a considerable guarantee amount and a low merchandise cut rate.

Expenses must be taken into consideration for the tour. There are many factors that have to be considered for expenses. Gasoline, lodging, and food are some of the factors that are taken into account for a touring musician’s expenses. In his article. Shane argues that managers and booking agents take money out of the touring musicians’ profits. However, he only assumes that bands are using managers and booking agents. There are many bands that also self-manage and self-book their own tours, effectively circumventing the need for a booking agent or manager. This will help the touring musicians save money on their tour. Ari argues that gasoline must be conserved for the tour because it is one of the more expensive factors. Assuming gasoline must be saved, musicians should always travel the most direct and quickest route to the destination of the venue. Hotels should be avoided for lodging as they are expensive. Touring musicians are recommended to utilize rest areas to avoid hotel costs. Groceries should be bought in bulk to save money for the tour, as individual meals tend to be much more expensive.

Sales help the touring band profit from their tour. The main income generator from the tours are the sales of merchandise. The bands must take into account the amount of money it costs to print their shirts as well as the amount of money it costs to charge to buy their shirts. Aside from clothing merchandise sales, there are several other ways to make profits from your music while in the music industry. As part of marketing for to draw people for your tour, musicians can submit and license their music for movie and TV licensing. Steve Knopper, a writer for Rolling Stone believes that there are more alternative ways to make substantial profits for touring as opposed to standard CD sales from a label. Steve Knopper discusses how licensing can help touring musicians:

“Low CD sales have prevented artists from making as much money off publishing royalties as they used to – but licensing fees from movies, commercials and TV shows from The O.C. to Breaking Bad have picked up some of the slack. One top music-business source estimates that Green Day made hundreds of thousands of dollars by licensing “99 Revolutions,” from their upcoming album !Tre!, for the end-credits of the recent Will Ferrell-Zach Galifianakis political farce The Campaign” (Knopper).

Licensing music to a television show or a movie can help a musician gain exposure through the viewers who are watching the film. These viewers can in turn become fans of the band that provided the song of the soundtrack and decide to look for their music, merchandise, and even go to the musicians’ concerts as well. Knopper reports, “Potential payday: $250,000-$600,000. About half usually goes to the performer, with the other half going to whoever owns the song’s publishing rights”. Television and movies are a great source for exposure, because many shows on television networks can potentially get millions of viewers. Movies that are in theaters can generally get to hundreds of thousands to millions of viewers. Alternative forms of sales can serve as a marketing purpose which can lead to merchandise and ticket sales, which tend to be a more direct form of profit for touring musicians.

Touring can be profitable if the musicians take care of planning, expenses and the sales well. Too many musicians accept touring as a loss in their profits in exchange for exposure to fans. Careful budgeting, prudent planning, and the ability to maximize sales are instrumental to the touring success of a band. As long as a band can be watchful of their expenses, touring can be profitable for a band. Musicians must know how to cut back on their expenses because they will be spending days and weeks constantly traveling until the tour comes to an end.

RIAA Accounting: Why Even Major Label Musicians Rarely Make Money From Album Sales

Summary:

Mike Masnick, writer and editor in Techdirt states that musicians on major labels can lose a big amount of money on music sales. The reason why musicians make less money on major labels is not the fault of the musician, it is the direct result of the record label taking a big part of the musicians earnings. Masnick cites a report from The Root, saying that for every thousand dollars worth of album sales, major record label musicians only get twenty-three dollars and forty cents on average. Furthermore, while record labels take over half of the money that musicians make, the distributors of the albums take roughly a quarter of the money that musicians make. Only above one-eighth of the money actually goes to the band, and even less if there are managers, lawyers, or producers involved. Finally the remaining money of the one-eighth of the original sales is divided up equally among the members of the band.

Masnick compares major record label deals to scams. He states that popular bands such as 30 Seconds To Mars have “never made a dime” from album sales, yet they sold 2 million records and gained platinum status on the RIAA. Major labels such as Warner Music have been known for obscuring accountancy for royalties owed to bands, because they have redeemed bands “unrecoupable”. Record label companies tries to take money out of album sales to account for the money spent on the album. The record label also tries to buy the copyrights to the music itself too, putting the musicians at even more at a disadvantage.

Analysis:

Mike Masnick makes valid points on his arguments, but there are some fallacies in his opinions. In one statement, Masnick tries to appeal to ridicule stating, “Of course, it’s actually even more ridiculous than this report makes it out to be. Going back ten years ago, Courtney Love famously laid out the details of recording economics, where the label can make $11 million… and the actual artists make absolutely nothing” (Masnick). Although Masnick is discussing the truth on what happens to musicians on major record labels, he makes exaggerations such as using words as “absolutely nothing”. An accurate phrase to describe the amount that Masnick should have used is very little, than the phrase absolutely nothing, because the musicians still were able to make an amount from the sales. Masnick also makes a comparison of the record label deals to scams,

“So, back to our original example of the average musician only earning $23.40 for every $1,000 sold. That money has to go back towards “recouping” the advance, even though the label is still straight up cashing 63% of every sale, which does not go towards making up the advance. The math here gets ridiculous pretty quickly when you start to think about it. These record label deals are basically out and out scams” (Masnick).

While the record label deals are downright disadvantageous, and to an extent deceitful to musicians, record label deals may not be the legitimate definition of a scam. A record label deal, no matter how disadvantageous it is, may not be a scam. Record label companies make contracts that musicians need to read carefully. It is the job of the musicians to know what they are getting into when they sign a contract with a major record label company.

Response:

I agree with Masnick, because the major record label tends to exploit the musicians out of the money they earn. Record label companies can be malicious to the career of musicians, but they may not be legitimately a scam. Contracts were meant for musicians to read, and musicians have the ability to negotiate their contracts if they read carefully. Independent record labels are far more less likely to take advantage of the profits of the musicians. This article gives a reason for musicians to consider DIY methods of band management, or signing to independent record labels.